The link between financial literacy and level of debt : a study of junior performance bank employees

Abstract

This study assessed the link between financial literacy and levels of debt among junior permanent bank employees. Based on the mixed purposive and simple random sampling approach, a structured questionnaire was used to collect primary data from a sample of 275 junior permanent bank employee participants. Frequencies, descriptive statistics and binary logistic regression techniques were applied to analyse data using the SPSS 23 statistical package. The Cronbach’s alpha criterion and Keiser-Meyer-Olkin measure of sampling adequacy results indicate that the research instrument’s items were statistically reliable and statistically valid. The descriptive statistics results on the financial behaviour and attitude dimension indicate that permanent junior bank employees on average pay reasonable attention to their financial affairs. The classification summary statistics indicate that financial literacy and financial behaviour and attitudes were significant predictors of the debt level. The Nagelkerke R-square indicates that some significant amount of overall variation in debt level was accounted for by financial literacy and financial behaviour and attitudes. Based on the odds ratios results, a statistically significant relationship between financial literacy and debt level was found in the study. Conversely, the estimated odds ratios results indicate a statistically significant negative relationship between financial behaviour and attitudes, and the level of debt